By Ankika Biswas and Lisa Pauline Mattackal
(Reuters) – Wall Street was on track for a lower open on Tuesday as megacap stocks retreated after a strong session, with additional caution creeping in ahead of jobs opening data and comments from Federal Reserve Chairman Jerome Powell later in the day.
Megacap tech stocks Microsoft (NASDAQ:), Apple (NASDAQ:) and Alphabet (NASDAQ:) slipped between 0.4%-0.8% in premarket trading, pulling back after gains in the previous session.
Benchmark 10-year Treasury yields slipped slightly on the day but were hovering around multi-week highs, also weighing on rate-sensitive growth stocks. [US/]
“Inflation is continuing to remain sticky, interest rates continue to remain high, there seems to be a bit of rotation or at least profit taking going on in some of these names that have done really well,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
Pavlik also cited investors looking to adjust portfolios ahead of the U.S. presidential election, as the possibility increases of a second term for former President Donald Trump.
AI chip leader Nvidia (NASDAQ:) also dropped 1.2%, with other semiconductor stocks such as Micron Technology (NASDAQ:), Marvell (NASDAQ:) Technology and Arm Holdings (NASDAQ:) also slipping between 1% and 1.7%.
On the data front, the job openings and labor turnover survey, or JOLTS, is due after market open and is expected to show job openings fell to 7.910 million in May from 8.059 million the month prior.
The data is the first in this week’s series of U.S. jobs reports, particularly Friday’s non-farm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates – a key determinant of economic health.
Investors will parse remarks from Powell in a policy panel before a European Central Bank forum on central banking for further clues on how policymakers have assessed recent data.
As recent data signals a renewed moderation in inflation and some signs of economic weakness, market participants are holding on to their bets around two interest rate cuts by this year-end, starting from September, as per LSEG’s FedWatch data.
With the equity market closed on Thursday on account of U.S. Independence Day, trading volumes are expected to be light throughout the week.
At 8:42 a.m. ET, were down 120 points, or 0.3%, were down 23 points, or 0.42%, and were down 104 points, or 0.52%.
Among others, Paramount Global climbed 3.8% after billionaire Barry Diller’s digital-media conglomerate IAC is exploring a bid to take control of the media giant.
Atlassian (NASDAQ:) rose 2.7% after Piper Sandler upgraded the enterprise software maker to “overweight” from “neutral”, while CrowdStrike Holdings (NASDAQ:) slipped 2.3% after the same brokerage downgraded the cybersecurity firm to “neutral” from “overweight”.
The U.S. listing of drugmaker Novo Nordisk (NYSE:) lost 3.0%, while rival Eli Lilly (NYSE:) dropped 1.9% after U.S. President Joe Biden and Senator Bernie Sanders called on the Danish drugmaker to cut prices of its Ozempic and Wegovy drugs.
